Northwestern Mutual

Northwestern Mutual to Pay Nearly $4.9 Billion in Dividends to Policyowners in 2011

MILWAUKEE (BUSINESS WIRE), October 27, 2010 - The Board of Trustees of The Northwestern Mutual Life Insurance Company has approved a dividend payout of nearly $4.9 billion for participating policyowners for the year 2011, an increase of more than $150 million over its expected 2010 payout.

With this payout, the financial security company expects to continue to lead its industry in total life insurance dividends paid. Northwestern Mutual currently pays more in ordinary life insurance dividends than the next two highest-paying companies combined.

The company credits its dividend payout to careful underwriting, rigorous expense management, diversified investing, and strong performance in other operating fundamentals.

“Our 2011 dividend is great for our policyowners,” said John Schlifske, chairman and chief executive officer of Northwestern Mutual. “In absolute terms, it’s a terrific payout—the second highest we’ve ever paid. We are particularly proud of how we perform compared to the industry. We pay more in dividends than companies that are larger than us, and we do that while also being among the financially strongest companies in the world.”

Northwestern Mutual’s structure as a mutual company allows it to return a portion of its investment gains and favorable results from claims and expense experience to participating policyowners in the form of dividends. While dividends are not guaranteed, with this announcement Northwestern Mutual will have paid dividends to policyowners for 140 consecutive years.

“We are also very proud of our consistent performance,” said Schlifske. “We’ve been able to deliver value consistently over the long term in good economic times and in bad.”

Highlights of the 2011 Estimated Dividend Payout

The financial security company highlighted the following aspects of its 2011 dividend, as well as the separate dividend announcement of its subsidiary, the Northwestern Long Term Care Insurance Company:

Life Insurance – About 90 percent of the $4.9 billion will be paid to participating permanent life insurance policyowners. Schlifske noted that more than half of policyowner dividends paid on permanent life insurance policies come from favorable underwriting and expense results. Northwestern Mutual shares savings in these areas with its policyowners through dividends.

Term Life Insurance – Nearly $123 million in policyowner dividends is expected to be paid to term life insurance policyowners in 2011.

Disability InsuranceThe company expects policyowner dividends in its disability line to reach $233 million in 2011. The company estimates its DI dividend will be about 10 times greater than the second-highest paying company.

Fixed and Variable Annuities – These annuity products are expected to receive nearly $27 million in dividends during 2011.

Long-Term Care Insurance – The Board of Directors of the Northwestern Long Term Care Insurance Company approved a dividend payout of $11.2 million on long-term care policies for 2011. Northwestern Long Term Care is one of the few companies to pay a dividend to holders of long-term care insurance policies and again expects to lead the industry in long-term care dividends paid.

2011 Dividend Scale Interest Rate on Unborrowed Permanent Life Insurance Funds

The company’s expected 2011 dividend payout is attributable in part to the performance of Northwestern Mutual’s $150 billion investment portfolio, which backs the company’s participating permanent insurance products. In 2011, the company will calculate dividends on most unborrowed permanent life insurance funds using a dividend scale interest rate of 6.00 percent, in an environment in which new long-term corporate bonds are paying about 4.00 percent. The company’s dividend interest rate was 6.15 percent during 2010.

Resources for Policyowners and the Public

The following online resources provide additional background on how Northwestern Mutual determines dividends, its investment portfolio and its financial strength ratings.

How We Determine Dividends - Explains how Northwestern Mutual calculates the dividend payout on most permanent life insurance policies.

Investment Report – Provides background on Northwestern Mutual’s investment strategy.

Financial Ratings – Lists current company ratings and the rating agencies’ full reports.

About Northwestern Mutual

The Northwestern Mutual Life Insurance Company, Milwaukee, WI, a FORTUNE 500 company with more than $1.2 trillion of life insurance protection in force, has been helping its policyowners and clients achieve financial security for more than 150 years.

Through the Northwestern Mutual Financial Network, the marketing name for the company’s nationwide sales distribution arm, the company and its affiliates deliver a unique approach to combining insurance and investment solutions to help clients achieve financial security. These solutions include life insurance, long-term care insurance, disability insurance, annuities, mutual funds, and employee benefit services. Northwestern Mutual’s subsidiaries and affiliates are comprised of Northwestern Mutual Investment Services, LLC, a wholly owned company, broker-dealer, member of FINRA and SIPC; the Northwestern Mutual Wealth Management Company, a wholly owned company of Northwestern Mutual and limited purpose federal savings bank; Northwestern Long Term Care Insurance Company; and the Russell Investment Group.

Further information on Northwestern Mutual, its subsidiaries and affiliates can be found at:

10/27/2010 11:22:51 AM